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The Irony in the GameStop Story

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Re: The Irony in the GameStop Story

#71

Post by paradox242 »

ascagnel_ wrote: post #39
heartbreak wrote: post #11

Earlier quoted context omitted.

I sincerely hope this comment ages well, but I doubt it will. A scenario where a majority of the retail traders in GME right now come out ahead would be surprising.

Agreed. There's a good reason why so many of these hedge funds held short positions -- $GME is a business facing significant headwinds beyond what you'd see from the pandemic and a typical P&L statement: - Their primary product is used game sales, and the biggest players in that sector are making active moves against such sales (see: the disc-less PS5 and Xbox Series S consoles). - Digital storefronts make purchasing…

The stock will resettle at something far lower than it is now, most people realize this. They are trying to ride this thing until the margin calls come in and a substantial number of short positions are closed. If that happens there will be blood in the water and big money for anyone able to sell during the frenzy. After that, it's everyone for themselves.

Re: The Irony in the GameStop Story

#72

Post by heartbreak »

jakelazaroff wrote: post #53
ckastner wrote: post #36

Earlier quoted context omitted.

> The brand is irrelevant. It’s just math and vengeance and in the end...a lot of retail folks are going to be left holding the bag as prices drop down to earth. The hedge funds have retreated, yet WSB is doubling down on the frenzy. The posts over there are just insane. QAnon levels of delusion against an enemy that has already retreated. Wall Street is just a straw man now, and WSB is using it to cannibalize WSB.

Have the hedge funds retreated? Last I heard there were still >100% short positions in GME.

If you were a hedge fund on the sideline last week, wouldn’t you be quietly shorting GME @ 300? The outstanding shorts aren’t necessarily held by the same firms.

Re: The Irony in the GameStop Story

#73

Post by bilbo0s »

xwdv wrote: post #33
drewcon wrote: post #8

I still feel like these stories are missing a core distinction. If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors. But that’s not what happened. The brand is irrelevant. I…

I don’t know why people keep saying it won’t be a good outcome for anyone. That’s irrelevant. This is like going to war, all will give some, but some will give all. At least we’re talking about money and not lives.

The problem is that not all will give some. The market makers are raking it in hand over fist.

Re: The Irony in the GameStop Story

#74

Post by gabriel34 »

drewcon wrote: post #8

I still feel like these stories are missing a core distinction. If these WSB folks rallied around GME because they were true believers of a beloved brand with faith in a turn around plan, god love em. I think that’s an interesting phenomenon that upgrades retail collective trading in much the same ways mutual funds behave on behalf of loads of retail investors. But that’s not what happened. The brand is irrelevant. I…

This is a distributed movement, some people have been holding the stock for over an year+, others bought into it on the past few weeks. There are people who bought it as a meme stock, when it was relatively stable, as the devaluation from the market transition towards digital media had already mostly been factored into the price. Steam is not a new thing, after all. The fundamentals at the time supported the price, in hindsight it was about the lowest price the share has ever been at[1]. The CEO change precipitated other people to buy into the fad. This combined with the short overexposure counterbalanced the speculative attack from the hedge funds.

[1] https://www.nasdaq.com/market-activity/stocks/gme/advanced-c... select log scale, period=max

Re: The Irony in the GameStop Story

#75

Post by TameAntelope »

MontagFTB wrote: post #10

This article claims the catalyst for GME’s meteoric rise was a change to their board altering the company’s narrative. Josh Gross claims it’s because u/DFV liked their 10-Qs. So which is it? One? Both? Neither? https://twitter.com/endtwist/status/1354547622133051393?s=20

Wow, I didn’t know u/DFV saw this before Burry, I thought he was tipped to it by movement from Burry!

I am very suspicious of WSB generally, but just like with Anonymous, there apparently are some skilled folks in the horde...

Re: The Irony in the GameStop Story

#76

Post by briefcomment »

bilbo0s wrote: post #64
briefcomment wrote: post #23

Earlier quoted context omitted.

I'm pretty sure bringing up fundamentals is intentional FUD. Nobody is investing in any of these because of fundamentals. It's the public vs hedge funds and GME et al is the battlefield. The more people take part and have strong hands, the more the losses will be democratized, on the way to the real desired outcome against naked shorting hedge funds. I don't mind losing a couple hundred bucks investment for this.

It’s not really public v hedge funds, because the vast majority of both of them will be on the losing side. The reality is that market makers are probably gonna be the only winners here.

If this is successful, hedge funds will suffer, some retail investors will make a huge return, and some other retail investors will suffer losses at the end, much more than otherwise would have. Obviously not ideal, but no situation is perfect. The losses to the retail investors can be minimized if more join in and they take smaller positions on average.

How do market makers get outsized benefits from this? I'm uninformed.

Re: The Irony in the GameStop Story

#77

Post by fakedang »

MontagFTB wrote: post #10

This article claims the catalyst for GME’s meteoric rise was a change to their board altering the company’s narrative. Josh Gross claims it’s because u/DFV liked their 10-Qs. So which is it? One? Both? Neither? https://twitter.com/endtwist/status/1354547622133051393?s=20

I've seen way too much rationalization of this from mainstream financial media "pundits". Lol'd when I heard Andrew Ross Sorkin's take on it.

I do know that the DFV post was the match, but I think stimulus + people generally wanting to take revenge + the WSB post that revealed that Melvin was shorting GME, so let's fuck it up + Robinhood's post-pandemic popularity were the reasons for this to go out of control unlike other previous movements.

One thing it has shown is how much vulnerable the US financial system is. Although this time it was retail investors left holding the bag, this situation could be destructive very easily.

Imagine now, if Russia wanted to take down the US economy. They could create a buffer hedge fund, maybe 3-5B, which would be obliterating itself anyways. Then get some bots to bump up activity around a particular stock, maybe generate fake short interest against GS (smallest big 6 bank, so I chose it). Then create a CtA on WSB, calling for a mass short to dethrone GS based on fake information, and pump it up with bots. Retail starts shorting, Algobots might pick up on the momentum and join the trend, followed by traditional HFs joining the crowd. In the end, you'll have GS being shorted for no particular reason, but enough to cause some serious damage momentarily. Price goes down, they get deemed overlevered, and they're forced to take a bailout (highly damaging to the politicians in Congress who support it) or led to fail (which would cause shockwaves across the street). It's likely the politicians will sacrifice themselves for a cushy job post politics, but the current ruling party would lose all legitimacy in front of its voters.

I imagine such a scenario would be easily plausible in Europe, where the banks are much weaker financially (save for the Swiss ones).

Re: The Irony in the GameStop Story

#78

Post by bilbo0s »

heartbreak wrote: post #72
jakelazaroff wrote: post #53

Earlier quoted context omitted.

Have the hedge funds retreated? Last I heard there were still >100% short positions in GME.

If you were a hedge fund on the sideline last week, wouldn’t you be quietly shorting GME @ 300? The outstanding shorts aren’t necessarily held by the same firms.

They could game it all the way up, and collect all the way down. Lots of shorts could make enormous amounts of money right now.

Re: The Irony in the GameStop Story

#79

Post by swader999 »

heartbreak wrote: post #56
peterwoerner wrote: post #21

Earlier quoted context omitted.

https://twitter.com/PigeonsK/status/1354824493982773249 Argument for cascading.

The assumptions in that 4chan screenshot are putting in a lot of work.

Who backs each party isn't that hard to verify. The only assumption is the copy cat trading of Melvin's strategy which seems fairly safe to make.

Re: The Irony in the GameStop Story

#80

Post by maxerickson »

drewcon wrote: post #50
spiderfarmer wrote: post #35

Earlier quoted context omitted.

I think you don't understand what wallstreetBETS is all about. It's not investments. It's playing the casino. They are betting. And proud of it. And this is one of the first times they have an advantage over the rest of the table. Because a couple of hedge funds overplayed their hand on a stock small enough to be influenced by the people active in that sub. They are ready to lose it all just for the lulz. It's entert…

No I do understand that. And I’m suggesting that is a bad thing. It’s also illegal, which seems to have been left out of all the conversations. “ The rush by short sellers to cover produces additional upward pressure on the price of the stock, which then can cause an even greater squeeze. Although some short squeezes may occur naturally in the market, a scheme to manipulate the price or availability of stock in order…

What's the standard for manipulation?

If retail investors publicly coordinate buys is that manipulation?

What if they pool their assets and appoint a controller? ("make their own managed fund").

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